BRAD SMITH: Good morning. Thank you for joining us. I’m Brad Smith. I lead the Department of Legal and Corporate Affairs here at Microsoft.

I’m really delighted to be joined here in this room in Redmond, Washington, with Steve Ballmer our CEO, and with some of the great nonprofit leaders in the world that also happen to work in our backyard. We’re here to share some news, and share it with people literally across the country and around the world about some of the new steps that we’re taking as a company, but by no means alone, in partnership with so many other groups across the United States, and in over 100 countries around the world.

What we’re going to do this morning is spend a little bit of time first talking a bit about the problem that we’re focused on trying to solve, to hear a little bit from people who are leading important nonprofit efforts, and from young people themselves who really have, I think, a first-hand perspective that is informative for us all about the state of the world and what we can do to help address it.

What we’re here to talk about is, in fact, a growing problem that we at Microsoft have had the opportunity to witness first-hand, and to really see in many countries around the world. One of the really interesting things about the work that Steve does, and that I get to do, is it gives us the opportunity to travel, and to hear from people in business, people in the nonprofit sector, people who work in government, and young people themselves. And it just makes all too clear that the world has changed, the global recession has had quite an impact and, in fact, it’s really young people who perhaps have been the hardest hit of all.

Across the world, we have a burgeoning population of youth. There are over two billion people today globally between the ages of six and 24. But this is a group of people that is definitely feeling challenged. If you look at the global unemployment rate today for workers under the age of 25, these are typically people who are between the ages of 16 and 25, the unemployment rate for them is 12.7 percent worldwide. That’s more than double the unemployment rate for workers as a whole.

And as we’ve had the chance to connect with people and talk to nonprofits that are working in this space, the challenges that young people face have become increasingly clear. Increasingly there is an opportunity divide that really separates young people who are getting access to the skills and education they need, and other people who are not getting that kind of access.

Around the world today, it’s still the case that 40 percent of young people don’t have the opportunity to go to a secondary school. There are still 100 million people in the world in this age group that actually don’t have the opportunity to go to any school at any point in their life. And even in countries like the United States, or up and down the Americas, or across Europe, where people have plentiful access to secondary education, we still see a real challenge for young people, people who are having a harder time either going to college, or getting through college, or getting the skills that they’re going to need to connect with the jobs that the workplace of tomorrow is, in fact, already creating today.

In our industry, we see this first-hand. Every day we actually open up new jobs, but the reality is that across Microsoft and our industry, and many, many companies, we’re simply creating jobs that have become increasingly difficult to fill. In fact, the number of unfilled jobs is rising faster than the number of filled jobs. And it’s not just the tech sector, and it’s not just the United States.

The World Bank recently estimated that in Brazil 40 percent of all of the companies in the country are struggling to find and recruit and hire qualified people to fill the jobs that they’re creating.

So, the opportunity divide is a real problem. It’s a problem for young people, and it’s a problem for economies as a whole. But the other thing that we’ve had the opportunity to see first hand is the difference that one can make when you happen to work at a technology company and have the chance to partner with the right nonprofits, and reach the right people around the world.

There were a couple of people that I had the chance to meet over the last year that definitely brought this home for me. One is a young woman in Mexico City, her name is Ignacia (ph). She works on a farm, a small farm that her family owns where they grow tomatoes. She was a young woman with a dream. She wanted to find new ways to help her family do a better job of making the big opportunities that she thought their farm represented.

Well, it so happened that Ignacia was lucky, she connected with a terrific nonprofit in Mexico that we’ve been really fortunate to work with for a number of years, and we were able to provide the technology training that this young woman put to some amazing use. She went through these courses, and she applied what she learned. And she worked with her family to change not only the work they do to grow tomatoes, but even more importantly to connect and pursue better opportunities to see what they create, literally, to the world.

As a result of what she’s done, her family now has a contract with one of the biggest retailers in the United States. And it has started to put her and her entire family on an exciting path.

Another really great illustration of this is three young men who graduated from a university in Brazil just two years ago. They graduated with a big dream. In some ways, it wasn’t all that different from the dream that some of the young people had when they started this company at Microsoft. They wanted to start an online business, and go into the e-commerce field and start selling tickets online. So, they created a company called Zechs (ph). Now, they were just three guys, but they recognized that with the Windows Azure-based cloud service, and a program that we have called BizSpark that provides technology tools to startups, they could, in fact, jumpstart their business.

And so what they did a year ago is provide all of the online ticket sales to one of the biggest events that takes place every year in Brazil. It’s called Rock on Rio. And I know from the people I’ve talked to in Brazil that they know how to rock on in Rio. And so, what these guys did is launch their service, and over the course of less than 48 hours last year, they sold over half a million tickets online. And they were able to use that to really put their business on a sound footing and move it in the right direction.

It’s those kinds of things that have really caused us, and inspired us to focus our corporate philanthropy and more across our business on helping to close this opportunity divide. We really do believe it’s one of the most important steps that we can take as a company in this field. So, that’s really what we’re here to talk about a bit this morning.

We’ve had the chance over the last 18 months to learn from a lot of people, including some of the people in the room today, and people like them who work in every continent except save Antarctica. And what I think is really exciting is to hear a little bit from them, and then Steve will talk a little bit about where we’re going, and the new programs, and the new commitment, and the big stake in the ground that we’re putting in place today.

So, I would like to welcome, and spend a few minutes with two individuals who happen to be here today, Calvin Lyons, Calvin is the CEO of the Boys and Girls Club in Puget Sound; and Jennifer Corriero, who is the executive director of Taking It Global. So, Calvin and Jennifer, if you could join me.

(Applause.)

Now, before I begin, Jennifer, I’ve heard a rumor that your connection with technology in fact, goes back to high school years when you were doing some testing on Microsoft Office, is that right?

JENNIFER CORRIERO: Yes. We did some incredible consulting work with Microsoft back in ’99.

BRAD SMITH: That’s great. Well, you all play important roles in the nonprofit community. I was wondering if you could tell us a little bit from your vantage point how you see the opportunity divide for youth manifest itself and how do you see this having changed over time?

CALVIN LYONS: Thank you, Brad. Thank you for your time. Thank you for the support that Microsoft gives to the Boys and Girls Clubs, and the community. We appreciate it.

I would say from the vantage point of the Boys and Girls Club we see opportunities when kids come to our club and they are introduced to technology for the first time. In many cases their skill sets may not be up to that of their peers, but we have a very talented and nurturing staff that takes those opportunities and attacks them to close the opportunity divide. We also find that these kids are beginning to take these opportunities and learn how to do research and study. So, we’re seeing great benefits, but the need is so great. So, we’re as a Boys and Girls Club we’re in it for the long fight. So, we’re excited.

BRAD SMITH: That’s good.

JENNIFER CORRIERO: From my perspective, back in 1997, I was a teenager involved in community and technology-based projects. And I became aware of this divide that I saw sort of ahead for my generation when I was at a book launch for “Growing Up Digital.” And I became very concerned for the generation of young people that I was part of, but also for future generations of youth about this gap. And so that’s what motivated me to start Taking It Global with my cofounder, Michael Furdeck. And we’ve launched an online community to reach millions of young people, over 20 million since we first launched. We have over 400,000 members of our site that’s in over 13 languages.

Now, what we see in recent years is a rise in youth unemployment. And we all know that this creates social and political and economic instability, but I think the greatest risk is a generation of hopelessness. And so that’s where I think it’s really critical to harness the passion and the talent that young people have and their capacity to make the world a better place.

BRAD SMITH: That’s really helpful as a broad perspective. As we think about trying to make a difference, I mean, Calvin are there particular programs that the Boys and Girls Club has launched that you think are most important?

CALVIN LYONS: Sure. By all means, our president and CEO, Jim Clark has tasked us to ensure that kids receive the skills, the knowledge and access to achieve a great future. That is part of our marketing. And to do that what we’re doing is instituting programs like the Formula For Impact. The Formula For Impact helps us to identify the kids who need us most, to apply research-based youth development programming, and then to measure the outcomes in three priority areas. And those include academic success, good character and citizenship and healthy lifestyles. And we’re doing a great job with that, but again, the war goes on. And we’re in a war to save kids.

BRAD SMITH: Well, as you think about also helping to win that war, Jennifer, can you tell us a little bit about some of the specific programs that you’re pursuing?

JENNIFER CORRIERO: Yes, well, over the past decade we’ve had the privilege to work with hundreds of non-profit organizations, over 10 U.N. agencies, various government agencies, different companies like Microsoft, and philanthropic foundations. And what we’ve seen is just how critical it is to create spaces where young people can imagine and envision the future and have concrete support to develop their skills and to pursue their dreams and their ideas. And so we’ve created a range of programs, different webinars, workshops, online training, mentorship opportunities supporting youth with their ideas through seed funding, to really help people get their ideas going.

One example, Sara, she had this idea living in the suburbs of how much wasted space there is in backyards. And so she started this young suburban growers’ network and they’ve created learning gardens. And they’re bringing people into the gardens. They’re growing herbs and vegetables, and they’re giving them to the local food bank. Another example of a project from Latin America is a young person who is creating mobile technologies and apps to help encourage people to donate their blood. So, young people are bursting with ideas and they just need support.

BRAD SMITH: Well, I want to thank both of you for being here this morning, but more importantly, we really appreciate the opportunity that you’ve given us as a company to work with you. It’s great to see you take some of the technology that we create and put it to uses that I’m not even sure we would have imagined, but for the opportunity to work together.

CALVIN LYONS: Thank you.

BRAD SMITH: So, we really appreciate it.

JENNIFER CORRIERO: Thank you so much.

BRAD SMITH: We also want to take a few moments to hear from some of the inspiring young people we’ve had the chance to meet. Let’s start with a short video that tells the story of a very impressive woman from Kenya.

(Video segment.)

Now, please welcome two new guests, Brian Hughes, who helps as the technology coordinator for the Boys and Girls Club in our backyard, in Bellevue, and from Mombasa to Redmond, Mary Mwende, a participant in the Global Give Back Circle. Thanks to both of you. Mary, I think for any of us who have had the opportunity to visit Kenya I can see why you love it. And it’s great to have you in our country here today.

I wanted to ask you a couple of questions. Brian first, can you tell us a little bit about how you came to get involved in the Boys and Girls Club, your experience there and what you do now as a mentor for others?

BRIAN HUGHES: Sure, so I grew up in a low-income housing project not too far from here actually. And there was not much parent involvement, no adults that really cared. Kids kind of just did whatever they wanted. When I was going to middle school the Boys and Girls Club came right into our apartment complex. First I was like, more people trying to tell me what to do… And I gave it a chance. I kind of went in there and checked it out and I realized not only was it really fun, but there were adults that cared about me in there. And the one thing that really pulled me in was computers. And I used those computers and I did stuff like using Club Tech programs, and learning all about computers, and now it’s brought me to where I am today as a technology coordinator. I’m able to give back to the kids at the Boys and Girls Club.

BRAD SMITH: That’s great.

Mary, we obviously learned a little bit about you from the video. But, now you’re doing some amazing things yourself in the Global Give Back Circle. Can you tell us a little bit about what you’re doing?

MARY MWENDE: Most definitely. The Global Give Back Circle, first of all, to begin with, it’s an empowering and enablement process that makes sure that girls back in Kenya get through high school into the gut (sic) period, which is the period between high school, once you graduate high school and into university. There’s a gut period there, which the government is trying to actually reduce it, but there’s still much more to be done. And into university and finally into the workforce, that’s what the Global Give Back Circle makes sure that all the girls do not fall back into the cracks of poverty and back into the vicious circle.

And this is done through actually mentoring, and also financial enablement, because, come to think of it, if you just empower a girl, if you just only mentor a girl, it doesn’t yes, it will make a difference. I will be empowered. A lot of girls will be empowered. Then what next, what happens after that? Then the Global Giveback Circle makes sure that the girls not only get empowered, but they get enabled actually to join the workforce afterwards.

BRAD SMITH: That’s great. You each have had different experiences, but there are probably some similarities between what you’ve experienced as well. When you think about what you’ve each gone through, are there things that you’ve learned about what’s needed to help young people be successful?

BRIAN HUGHES: In my experience, I’ve learned it was so much easier to do the right thing when I had an adult that cared, when I had people that cared about what I was doing. And it really made me want to do the right thing. So, I think one thing that’s really important in the development of youth is having people that care about what they’re doing.

BRAD SMITH: Mary?

MARY MWENDE: I would say the same thing as Brian would say. Just imagine what would happen to a youth or, to make it more real, a girl who is out there in a world without resources and during a gut period, what would happen to that youth to any person who is young, what would happen to them during that period when they have nothing to do and they do not have the resources.

One of the things I’ve learned is that we need resources. We, as young people, we need all kinds of skills. We need mentorship. We need things to do. We need skills to engage ourselves. We have so much potential in us. We have so many ideas that we want to put out there to the world, but we don’t know how to do it. And if you do not have the right resources, and the right skills to actually put your ideas forward, then you can’t do it. But if you have people who care, adults who care, as Brian said, and then you have adults who are actually, organizations who are actually giving you the resources to actually realize your dreams, then you can definitely make it.

So, I believe that in the development of youth, skills, education, and just adults who care, and mentoring is really, really required.

BRAD SMITH: If there’s one piece of advice that you could offer to other young people based on what you’ve learned, what would you say to them?

BRIAN HUGHES: So, I would say, just because you don’t have adults immediately surrounding you, maybe parents or something like that that care about, don’t give up, because there are all kinds of organizations like Boys and Girls Club, and many others, that are there just to help youth, and just to help us get where we’re going. I think it’s really important to seek that out.

MARY MWENDE: I would say if you dream it, if you imagine it, if you believe it, you can definitely do it. It doesn’t matter where you are, it doesn’t matter how many few resources you have, and it doesn’t matter who is around you; if you believe it, imagine it, dream it, you’ll definitely do it someday.

BRAD SMITH: I think that’s probably great advice for all of us. So, thanks to both of you for joining us.

MARY MWENDE: Thank you.

(Applause.)

BRAD SMITH: Well, I would now like to ask Steve Ballmer to join us and talk a little bit about what we’re going to be doing as a company over the next few years to help address these challenges.

Steve, thank you for being here.

STEVE BALLMER: Well, thanks, Brad. Certainly thanks to Jennifer, to Calvin, to Brian and Mary, and it’s wonderful to have a chance to be here today.

Lately we’ve talked a lot at Microsoft about big, bold bets that we’re making, Windows 8, Windows Phone 8, our new Office product, and a number of other flagship product releases. Today I do also want to talk about a big, bold bet that the company is making, a different kind of bet, a bet to close this opportunity divide that we’ve been discussing for a target of 300 million young people around the world.

Today, I’m thrilled to have a chance to announce to you a new program that we call Microsoft YouthSpark. YouthSpark is a company-wide initiative to create opportunities for 300 million young people around the world in the next three years. Bold, ambitious, we hope achievable. We’re focusing our citizenship efforts and other company resources on connecting young people with opportunities for education, employment, and entrepreneurship.

To achieve this bold goal, we’re doing three things. First, we’re going to focus our corporate cash giving on nonprofits that are working with youth, including forming new strategic partnerships with major NGOs around the world. Second, we’re going to introduce a number of new citizenship programs focused squarely on empowering youth. And, lastly, we’re going to go beyond our philanthropy work to deliver global programs like Skype in the classroom, like our Office 365 for education offer much more broadly.

In short, we’re mobilizing our company to create opportunities for youth, and we think we’re uniquely positioned to make a major impact. Well, 300 million is a big number, so why would I be so confident? To start, this is in our DNA. We made a commitment 30 years ago as a company, Microsoft did, to philanthropy. And since then, have developed very deep partnerships and gained a breadth of experience across the world. We are a global company with a passion for local impact. We have employees, customers and partners all over the world with meaningful connections to local communities.

Altogether, there are 100 countries with Microsoft Citizenship programs already underway. We’re going to tap into those established relationships to drive this kind of real change. Beyond what Microsoft can do, we have our partners, our business partners and our NGO partners, but we also have a group of other 90,000 individual employees who came to Microsoft to change the world. They’re passionate about making a real difference with phenomenal technology as well as making a real difference in their communities. I’m incredibly proud of our people.

All in all, we think we’re very well positioned to spark this change through our new YouthSpark Initiative. YouthSpark is about empowering young people to imagine and realize their full potential. We’re committed to using our technology, our talent, our time, and our resources to help tackle the issues facing young people around the world.

If you didn’t know it beforehand, you certainly have heard today, this is a complex problem and a big challenge. However, I know we have the right vision and partnerships in place.

Take a look at Calvin and the work the Boys and Girls Clubs are doing to empower young people through Club Tech. The work that Jennifer is doing, outstanding work, Take It Global of course I like to say that, taking IT global, which is really correct to cultivate a community of young leaders and entrepreneurs. I’m inspired by Brian’s story, I really am, and how he was once a member of his local Boys and Girls Club, and now is a mentor and leader. It’s an exceptional, exceptional story. I’m inspired by Mary and her journey from Mombasa to being on stage with President Clinton in New York, and the work she’s now doing to give back to others.

We’ve seen the amazing things that young people can do when they get an opportunity, underscore that. A lot is made of the opportunities young people get who have opportunities. We have to make sure more people get the opportunity. We need to work to give these 300 million young people who might not have gotten an opportunity, we need to work very hard to give them the same opportunity that other young people will have.

It’s an incredibly exciting time to be at Microsoft. I think we’ll look back at this year, this year specifically, 2012, and we’ll see it in many ways as one of the most important years in our history. We’ll probably remember it first for Windows 8, and the wave of remarkable products, but I hope we’ll also look back and remember this is a year we made a decision that impacted in a very unique way the lives of the 300 million additional young people around the world.

Thanks to Brad, thanks to Mary, to Brian, to Calvin, to Jennifer for being an important part of this day and thanks to all of you joining us both here in person and on the webcast. We look forward to great partnership, great work, and great impact as we all spark the youth of the world. We appreciate it and thanks.

BRAD SMITH: Thank you, Steve.

In closing I just want to give a bit more detail about some of the new programs that we’re announcing today. You heard Steve talk about a few. There’s also three new things we’re launching today. One is called Give For Youth. This is a global micro-giving online marketplace that’s focused on raising funds for NGOs that support youth around the world.

A second is what we call the Microsoft YouthSpark Hub. This is an online space where young people can access all of the services and all of the programs and resources provided by Microsoft and select NGO partners. And this obviously focuses on and makes available the kinds of resources that we’re talking about here, resources that are really focused on providing young people with education, skills, employment and entrepreneurship.

And third, we’re launching what we call Innovate For Good. This is a global online community, a social effort, if you will, that’s designed to enable youth directly to collaborate with each other, to inspire each other, to support each other all while using technology that itself can make a difference.

This is a big step for our corporate philanthropy. But, as Steve said, Microsoft YouthSpark is really about more than philanthropy. It is about bringing together a range of new, existing and enhanced programs all focused on empowering young people. As Steve said, this includes Office 365 for EDU, or education, so that young people, students around the world get free access to the best productivity solution on the planet.

It’s about Skype in the Classroom, which is a free service that we’re very proud of that enables classrooms anywhere in the world to connect with another classroom anywhere in the world to find each other and make that connection and to connect with other people who can serve as a teacher for a day, if you will. It includes our DreamSpark, and our BizSpark programs that we have already found to be very impactful and that we think we can take to yet another level.

We obviously face a lot of challenges. And we know that no single company can even remotely dream of solving this problem by itself. But, we are determined to have a real impact. We decided to step forward and to step up. So, in the world of corporate philanthropy I do think that we’re putting quite a stake in the ground when, as you heard Steve say, we’re going to focus on trying to reach 300 million people in the next three years.

We’re investing half-a-billion dollars of the company’s money over the next three years to deliver services and tools and software that will have a fair market value that, in effect, amounts to a multi-billion dollar contribution. As proud as we are of the investment that we’re making and the tools that we’ve created, we know full well, as you’ve heard today, that it’s people who bring it to life. It’s people who work in non-profits. It’s the people who work with non-profits and make their opportunity real. We know that three years from now we’re still going to have some big problems to solve. But we are very optimistic about the opportunity working with others we will make between now and the middle of this decade.

Thank you to everybody who has joined us. Thank you for the people here in the room. Thank you for joining us to the people around the world who we get the opportunity to work with every day. We have some big things to do and we’re really excited to go do them.